In Tanzania an independent lawyer (Jumaa Mhina) has decided to run for a parliamentary seat. This is of course, a daily occurrence and quit boring. What interests us is his point of view regarding unemployment. Basically, he understands that capital (in terms of money is necessary) but also that know-how, skills and talent are a constituent part. This is, in essence, what Austrian Economics teaches. Capitals are comprised of many elements, some tangible and some intangible including time. When this capital is put to work it creates a market structure that it is suitable for the creation of goods and services which will eventually be sold to consumers. This market structure can be seen in practice as entrepreneurs seeking and modifying locations for their business, hiring employees, buying from suppliers, setting-up production lines, training people, performing marketing and so on. Having the money and the know-how to do all this is capital and Mr Mhina knows it.

But there is more. Typically you will hear politicians talk about preparing young people for future jobs. They are talking about education. And yes, education is also capital but this is not what Mhina is talking about. Mhina is talking about teaching self-reliance and this is key. Entrepreneurs cannot be hatched or taught, but people can be provided the necessary education that should they exhibit entrepreneurial skills, these will be expressed. And this is important.

Mhina is talking about “eradicating unemployment” and as a politician this would be a standard position. No politician would have in his/her platform a statement saying that unemployment will remain the same or it will raise. But Mhina’s position is different. He is not asking for government funding of enterprises (at least not yet) but for people to become entrepreneurs. Government intervention in the markets is typically a gigantic waste of time because of all the inefficiencies they bring with them. Governments hit and miss (mostly miss) but entrepreneurship is always positive. Government interventions are timed boosters which last only for as long as money is being spent, while entrepreneurship is a constant building process that never ends.

It is interesting to notice the different tendencies between politician in the “advanced” west and politicians elsewhere, where common sense is still allowed to flourish. In the West the main trust of politicians is in “government action”, one way or another. There is always some new regulation or law or subsidy or partnership to be “accomplished” for the “greater good” to flourish. This cannot be otherwise because through several generations people have been brainwashed into believing that the government giveth and the government taketh away and that this is the only path. Self-reliance? Pish Posh! Rely on the government for everything! And where has this gotten us? Into a financial and dictatorial quagmire. You have no rights and oh, by the way, you have not means of progressing. All thanks to “government action”.

However, other politicians in other places have not yet been contaminated by many decades of socialistic thinking and additionally, they don’t have money to spend to stay in power. So, what do they do? They look at a problem and try to find other solutions that actually work that do not involve government money spending simply because they don’t have any. And what happens when they do? They stumble across the very principles of Austrian Economics. Why? Because they work. In real life. No government necessary. Of course, most of these politicians have no idea that Austrian Economics even exists, but they use its principles nevertheless. Because they work. Oh. Did we mentioned that they use them because they work? Just checking…

Why is this important? Because by teaching people self-reliance politicians are opening Pandora's box. Once people realize that they can do whatever they set themselves to achieve, they don't need governments. Actually, typically it becomes patently clear that governments are nothing but a hindrance... and then political evolution happens... one disappointment at the time.

And so we have one politician in Tanzania that actually gets it. Of course, this is not to say that he won’t screw it up entirely. This would be our default position and assumption simply because this person is a politician and we know where politics leads to. We have been there. We are there. Politics does not work. And so the question is an old one, what happens when the irresistible force of Austrian Economics (in terms of self-reliance and entrepreneurship) collides with the unmovable stones of Politics and Government? We are sure that should Mr Mhina manage to win, he will find out soon enough… and the prospects of actually having any positive influence in unemployment will spin down into oblivion. But that’s just our opinion. Yours will probably diverge. Because, you know, you believe in governments. You believe in the “democratic process”. You believe in the “greater good” and in “society”. Fair enough, just one question, how do you explain the utter debacle we find ourselves in? Just a question, no need to get upset.

Note: please see the Glossary if you are unfamiliar with certain words.